Asymmetric Price Transmission: A Survey

Asymmetric price transmission has been the subject of considerable attention in agricultural economics. It is not only important because it may point to gaps in economic theory, but also because its presence is often considered for policy purposes to be evidence of market failure. In this paper we survey the literature on asymmetric price transmission. A wide variety of often conflicting theories of, and empirical tests for, asymmetry co‐exist in this literature. We classify the different types and causes of asymmetric price transmission and describe the econometric techniques used to quantify it. We also briefly review the results of empirical applications. Outstanding methodological problems and suggestions…